AMD’s Budget Gaming Chip May Help It Gain More Market Share

Advanced Micro Devices Inc. (NASDAQ: AMD) has seen its shares rise with the market in general on Monday, but the reaction may seem a bit muted considering that AMD is releasing entry-level Accelerated Processing Units (APUs) with the release of two Ryzen Desktop processors with built-in Radeon Vega graphics models for use with the wide selection of AM4 motherboards currently in market.

The AMD Ryzen 5 2400G and AMD Ryzen 3 2200G processors are said to combine four of the latest Zen central processing unit (CPU) cores with advanced Radeon Vega architecture on a single chip. The Ryzen 5 2400G is priced at $169 and the Ryzen 3 2200G is priced at $99.

What matters here is that AMD is signaling that its Ryzen 5 2400G processor delivers the same graphics performance in a single processor as combining the $199 Intel Core i5-8400 with an $89 NVIDIA GeForce GT 1030 discrete gaming GPU6. It also claims up to 156% more graphics performance than the Intel Core i5-84007, up to 21% more system performance than the Intel Core i5-84008, and up to 39% faster graphics performance when overclocked.

When companies are releasing lower-priced units, there is always a question of taking more profit versus taking more market share. In AMD’s case, its shares are taking it as the best of the top three in graphics and processors.

AMD shares were last seen up 3% at $11.65, in a 52-week trading range of $9.70 to $15.65. AMD’s consensus analyst price target from Thomson Reuters is $14.86.

The move may be part of what is accounting for some weakness in Nvidia Corp. (NASDAQ: NVDA) shares. Those shares were last seen down 2.6% at $226.05 on Monday. The 52-week range is $95.17 to $249.27, and the consensus target price is $244.92.

Intel Corp. (NASDAQ: INTC) was up on the day, but not as much as AMD shares. Intel was last seen up 1.9% at $44.78 a share, in a 52-week range of $33.23 to $50.85. Intel’s consensus analyst estimate is now $51.86.

Jim Anderson, AMD’s senior vice president and general manager of the Computing and Graphics Business Group, said:

When we launched our first Ryzen processors a year ago, we began driving innovation and competition across the PC market. We remain dedicated to this mission throughout 2018, as we further strengthen our Ryzen portfolio by adding two leadership APUs designed to meet the varying needs of today’s PC users. AMD Ryzen Desktop APUs are a perfect example of the innovation we bring to market for consumer and commercial PC users. Combining our high-performance CPU and GPU architectures, this new category of Ryzen desktop processors is designed to deliver a smooth overall computing experience, as well as the ability to enjoy true 1080p HD gaming, eSports or advanced display features through the visual fidelity of the built-in Radeon Vega graphics.